Caring for a Loved One from a Distance

Trying to coordinate care from a distance becomes a challenge for many, especially since as many as 80% of caregivers are working. Add COVID-19 into the mix, and the situation becomes even more difficult, reports the article “When your parent is far away and you are trying to care for them” from the Pittsburgh Post-Gazette.

The starting point is to have the person you are caring for give you legal authorization to act on their behalf with a Power of Attorney for financial affairs and a Health Care Directive that gives you authority to receive health information under HIPAA (Health Insurance Portability and Accountability Act). It is HIPAA that addresses the use, disclosure and protection of sensitive patient information.

Next, have a conversation about their finances. Find out where all of their important documents are, including insurance policies (long-term care, health, life, auto, home), Social Security and Medicare cards. You’ll want to know where their tax documents are, which will provide you with information on retirement accounts, bank accounts and investments.

Gather up family documents, including birth, death, and marriage certificates. Make sure your loved one has completed their estate planning, including a last will and testament.

Put all of this information into a binder, so you have access to it easily.

Because you are far from your loved one, you may want to set up a care plan. What kind of care do they have in place right now, and what do you anticipate they may need in the near future? There should also be a contingency plan for emergencies, which seem to occur when they are least expected.

Find a geriatric care manager or a social worker who can do a needs assessment and help coordinate services, including shopping for groceries, medication administration and help with basic activities of daily living, including bathing, toileting, getting in and out of bed, eating and dressing.

If possible, develop a list of neighbors, friends or fellow worshippers who might create a local support system. If you are not able to visit with any degree of frequency, find a way to see your loved ones on a regular basis through video calls. It is impossible to accurately assess a person’s well-being, without being able to see them. In the past, dramatic changes weren’t revealed until family members made a trip. Today, you’ll be able to see your loved one using technology.

You may need to purchase a smartphone or a tablet, but it will be worth the investment. A medical alert system will provide further peace of mind for all concerned. Regular conference calls with caregivers and your loved one will keep everyone in touch.

Caring from a distance is difficult, but a well-thought out plan and preparing for all situations will make your loved one safer.

For more information about this or other topics, click here.

Reference: Pittsburgh Post-Gazette (Sep. 28, 2020) “When your parent is far away and you are trying to care for them”

 

What are the Important Medicare Deadlines?

Here are the important dates for Medicare enrollment:

  • You can initially enroll in Medicare during the seven-month period that begins three months before you turn 65.
  • If you continue to work past 65, sign up for Medicare within eight months of leaving the job or group health plan or penalties apply.
  • The six-month Medicare Supplement Insurance enrollment period starts when you’re 65 or older and enrolled in Medicare Part B.
  • You can make changes to your Medicare coverage during the annual open enrollment period, from Oct. 15 to Dec. 7.
  • Medicare Advantage Plan participants can move to another plan from January 1 to March 31 each year.

Yahoo News’ recent article entitled “Medicare Enrollment Deadlines You Shouldn’t Miss” takes a look at when you need to sign up for Medicare and the penalties that can be imposed for late enrollment.

Medicare Parts A and B Deadline. Individuals who are getting Social Security benefits, may be automatically enrolled in Parts A and B, and coverage starts the month they turn 65. However, those who haven’t claimed Social Security must proactively enroll in Medicare. You can first sign up for Medicare Part A hospital insurance and Medicare Part B medical insurance during the seven months that starts three months before the month you turn 65. Your coverage can start as soon as the first day of the month you turn 65, or the first day of the prior month, if your birthday falls on the first of the month. If you fail to enroll in Medicare during the initial enrollment period, you can sign up during the general enrollment period between January 1 and March 31 each year for coverage that will begin July 1. Note that you might be charged a late enrollment penalty when your benefit begins. Monthly Part B premiums increase by 10% for each 12-month period you delay signing up for Medicare, after becoming eligible for benefits.

If you or your spouse are still working after age 65 for an employer that provides group health insurance, you must enroll in Medicare within eight months of leaving the job or the coverage ending to avoid the penalty.

Medicare Part D Deadline. Part D prescription drug coverage has the same initial enrollment period of the seven months around your 65th birthday as Medicare Parts A and B, but the penalty is different. It’s calculated by multiplying 1% of the “national base beneficiary premium” ($32.74 in 2020) by the number of months you didn’t have prescription drug coverage after Medicare eligibility and rounding to the nearest 10 cents. That’s added to the Medicare Part D plan that you choose each year. As the national base beneficiary premium increases, your penalty also goes up.

Medicare Supplement Insurance Plan Deadline. These plans can be used to pay for some of Medicare’s cost-sharing requirements and some services that traditional Medicare doesn’t cover. The enrollment period is different than the other parts of Medicare. It is a six-month period that starts when you’re 65 or older and enrolled in Medicare Part B. During this open enrollment period, private health insurance companies must sell you a Medicare Supplement Insurance plan, regardless of your health conditions. After this enrollment period, insurance companies can use medical underwriting to decide how much to charge for the policy and can even reject you. If you miss the open enrollment period, you’re no longer guaranteed the ability to buy a Medicare Supplement Insurance plan without underwriting, or you could be charged significantly more, if you have any health conditions.

Medicare Open Enrollment Deadline. You can make changes to your Medicare coverage during the annual open enrollment period from October 15 to December 7. During this period, you can move to a new Medicare Part D prescription drug plan, join a Medicare Advantage Plan, or stop a Medicare Advantage Plan and return to original Medicare. Changes take effect on January 1 of the following year.

Medicare Advantage Open Enrollment Deadline. Participants can move to another plan or drop their Medicare Advantage Plan and return to original Medicare, including purchasing a Medicare Part D plan, from January 1 to March 31 each year. You can only make one change each year during this period, and the new plan will begin on the first of the month after your request is received.

For more information about this and other topics, visit our website and sign up for the blog and newsletter now. Click here.

Reference: Yahoo News (July 27, 2020) “Medicare Enrollment Deadlines You Shouldn’t Miss”

How Else Can Nursing Homes Be Impacted by COVID-19?

Lack of funding is a big issue for nursing homes.“You layer COVID on top of that and… it’s a crisis on top of a crisis,” David Grabowski, a professor of health care policy at Harvard Medical School, told Yahoo Finance. “And that you started with a lot of nursing homes that didn’t have adequate staffing models, weren’t exactly strong at infection control, lacked resources in many, many regards, and then this hits, it’s definitely the industry.”

Yahoo Finance’s recent article entitled “U.S. nursing homes face ‘a crisis on top of a crisis’ with coronavirus and funding woes” explains that the nursing home industry has been facing a financial shortfall since at least 2013, particularly for non-Medicare margins, according to the American Health Care Association (AHCA). Non-Medicare margins are the revenues and costs associated with Medicaid and private payers for all lines of business. They dropped 3% in 2018, an increase from the year prior.

“Over 60% of people in the country that live in nursing facilities are dependent upon Medicaid,” AHCA President and CEO Mark Parkinson told Yahoo Finance. “And unfortunately, in most states, the Medicaid rates have been set at less than the actual cost to take care of the residents. So, it makes it very difficult to provide the kind of care that providers want when they’re underfunded so dramatically.”

In addition, Parkinson commented, “most of the people don’t understand that Medicaid is really a middle-class benefit, because if people live long enough to outlive their resources, it’s the only way that they can afford to be taken care of in a facility.”

Medicaid is a federal benefits program that gives health coverage to seniors, pregnant women, children, people with disabilities and eligible low-income adults. However, the federal government permits states to level the payment amounts long as they meet federal requirements.

“The failure to adequately fund Medicaid is primarily a problem with the states,” Parkinson said. “Each state gets to make its own decision on what its reimbursement will be for Medicaid. Although the national average is around $200 a day, the rate varies dramatically by states, and some states are as low as less than $150 a day. In the low funding states, like Illinois and Texas, the politicians just haven’t decided it’s an important enough priority to adequately fund it.”

According to the New York Times, COVID-19 has infected more than 282,000 people at about 12,000 facilities as of June 26. It has killed more than 54,000. There are roughly 15,600 nursing homes in the U.S., with more than 1.3 million residents and over 1.6 million staff.

“It’s important to note that COVID hasn’t discriminated, so it’s not just those worst-quality nursing homes that have seen cases,” Grabowski said. “It’s been equally apparent across the high quality and low-quality facilities, high Medicaid and low Medicaid facilities. We’ve found that it’s really about where you’re located that has driven these cases.”

Adding to the financial situation is the fact that testing for coronavirus in the thousands of nursing homes across the country can be very expensive. The AHCA and National Center for Assisted Living (NCAL) found that testing every U.S. nursing home resident and staff member just once, would cost $440 million. As the pandemic continues, more supplies are also needed. A recent NCAL survey found that many assisted living communities are running low on PPE (N95 masks, surgical face masks, face shields, gowns, and gloves).

Parkinson says, it’s a “failure to recognize the importance of the elderly. It’s a conscious political decision to underfund elder care,” he said. “It’s not defensible on any level, but it’s occurring in the vast majority of states.”

He went on to say that with more funding, nursing homes can be better prepared for the next health crisis.

to sign up for our newsletter, click here.

Reference: Yahoo Finance (June 30, 2020) “U.S. nursing homes face ‘a crisis on top of a crisis’ with coronavirus and funding woes”

Do I Need a Medigap Policy?

Medigap supplemental policies are sold by private insurance companies and either fully or partially cover cost-sharing aspects of Medicare Part A (hospital coverage) and Part B (outpatient care). However, one thing that feeds into the premium cost is how the insurer “rates” its Medigap policies, explains  CNBC’s recent article entitled “A ‘Medigap’ policy picks up some costs that Medicare won’t. Here are tips for choosing one.”

In fact, some insurers will provide discounts for two policies in the same household. Therefore, you would want to understand a carrier’s premium rating system, its claims history and the caliber of its customer service department. Don’t buy a policy just based on the cost.

About 62.3 million people, most of whom are 65 or older, are enrolled in Medicare. About a third of beneficiaries opt to get their Part A (hospital coverage) and Part B (outpatient care) benefits through an Advantage Plan (Part C). Those plans offer out-of-pocket limits and frequently will have dental and vision coverage or other benefits. They also typically provide Part D prescription drug coverage. The rest use original Medicare — Parts A and B — and, typically, add a standalone Part D prescription plan. In that scenario, unless you have some other type of coverage (i.e., employer-sponsored insurance or you get extra coverage from Medicaid), the option for lowering your out-of-pocket costs is a Medigap policy.

When you initially enroll in Part B, you have six months to buy a Medigap policy without an insurance company reviewing your health history and deciding whether to insure you. After this period ends, depending on the specifics of your situation and the state in which you reside, you may have to go through underwriting.

The reasons to buy a Medigap plan are different for each individual. A big difference in premiums can come from how they are “rated.” If you know this, it may help you to appreciate what may happen to your premium in the future. There are some insurers’ Medigap policies that are “community-rated.” This means everyone who buys a particular policy pays the same rate, no matter what their age. Other plans are based on “attained age.” That means the rate you receive at purchase, is based upon your age and will go up as you get older. A few others use “issue age,” where the rate will stay the same as you age, but it’s based on your age at the time you purchase the policy.

Your premiums also may jump from year to year due to other factors, like inflation and insurer increases.

Remember to see if there’s a household discount. Many insurers have this, and it can save 3% to 14%.

Click here to subscribe to our blog and read more about this and other elder law subjects.

Reference: CNBC (June 15, 2020) “A ‘Medigap’ policy picks up some costs that Medicare won’t. Here are tips for choosing one”

Why are Medicare Scams Increasing in the COVID-19 Pandemic?

Medicare scams are increasing in the COVID-19 pandemic. Motley Fool’s recent article entitled “Seniors, Be Wary of These Medicare Scams During COVID-19” discusses some red flags you should look out for to avoid being a victim.

  1. Callers requesting your Medicare number. Medicare typically won’t call beneficiaries and randomly ask them to verify their benefits. If someone calls you and requests your Medicare ID number, don’t give them your information.
  2. Callers requesting your Social Security number. If a bad guy gets your Social Security number, he can do a number of things with that information, any of which will create headaches for you. This includes opening a credit card in your name and charging a lot of expenses on it. If you get a caller who says he’s a Medicare representative who needs your Social Security number to process a health claim, don’t give it to him.
  3. Email or phone calls asking you to send money. Medicare doesn’t sell prescriptions over the phone or ask seniors to pre-pay for services. If someone calls asking you to send money or give out credit card information, it’s a bogus caller.
  4. A promise for early access to a COVID-19 treatment or vaccine. Right now, there is no COVID-19 vaccine. There is also no mail-order treatment that you can stock up on to protect yourself in case you’re struck with the virus. Therefore, don’t believe a caller who says he’s from Medicare and is offering you a chance to get in on a groundbreaking medication. Don’t pay him or share your Medicare ID number during that conversation. When an effective vaccine is available, Medicare will pay for it and let you know how to get it.
  5. Someone at your door claiming to be from Medicare. Medicare doesn’t have sales reps. Therefore, if someone says they’re from Medicare, lock the door and demand that that person leave immediately. Call the police, if you need help.

When a lot of seniors are worried, isolated, and in financial straits, they don’t need to fall victim to a scam. Be prepared and be aware of what common fraud attempts look like. That way, you’ll be in a good position to protect yourself.

If you receive a suspicious email or phone call, report it at 1-800-MEDICARE. This might prevent another senior from falling victim to what could be an extremely dangerous trap.

Reference: Motley Fool (May 25, 2020) “Seniors, Be Wary of These Medicare Scams During COVID-19”

If You Plan to Retire This Year, Be Prepared

If you’re sure that you are going to leave the working world and start your retirement life in 2020, better not put in your notice at work until you’ve done your homework. The Motley Fool article “Retiring in 2020? 3 Things You Need to Know” covers three important steps.

If you were born in 1958, then this is the year you celebrate your 62nd birthday—which means you are eligible to collect Social Security. However, if you do, your benefits will be reduced as you have not yet reached your “Full Retirement Age” or FRA. People born in 1958 need to be 66 and eight months to reach that important milestone. At that point, you can collect your full benefit. Collect earlier, and your monthly benefit is reduced for the rest of your life.

Born in 1954 or earlier? Full retirement age for you is 66, if you were born between 1943 and 1954. If if you were born at the tail end of this range, then you can collect your full Social Security benefit this year. However, it still may pay to hold off on claiming benefits.

The longer you can delay tapping your Social Security benefits, the better. From the time you reach your FRA until age 70, your monthly benefit grows by about 8% each year. Few investments today have that kind of guaranteed yield. Some advisors recommend tapping retirement accounts first and delaying Social Security benefits as long as possible. It’s worth taking a closer look to see how this can be of benefit.

If you are planning to retire, but you’re not 65, you’ll need to find and pay for health insurance until you celebrate your 65th birthday. You can enroll in Medicare a few months before your 65th birthday, but if you’re 62, then you have a three-year health insurance gap. Private health insurance is extremely expensive, there’s no way around it. Before putting in that letter to HR that you’re retiring, get some real numbers on this cost. If your employer will consider having you work part-time so that you can maintain your employer-covered health insurance, it may be a good idea.

If you’re closer to age 65, then COBRA is a consideration, although it may still be expensive. Typically, COBRA allows you to retain your existing health coverage if you change jobs, or are fired, for a certain amount of time. However, you have to pay for the full cost of health coverage.

If your gap is only three months, then COBRA might make sense. However, if your gap is a year or more, then you need to be realistic about health coverage options. Pre-existing conditions and a limited marketplace for individual coverage may make this the reason you keep working until 65. You should also check the rules of going from COBRA to Medicare—they may not be the same as going from an employee plan to Medicare.

The more prepared you are for retirement, the more you’ll be able to relax and enjoy this new phase of your life. If these three points have made it clear that you’re not yet able to retire, understand that it is better to work a little longer to reach your eventual goal of retirement, then to find yourself struggling to pay bills and jeopardize a lifetime of savings because of unexpected expenses.

Reference: The Motley Fool (Dec. 28, 2019) “Retiring in 2020? 3 Things You Need to Know”

The Dark Side of Dementia Care

You might expect the federal government to oversee and regulate assisted living facilities. However, since Medicare and Medicaid usually do not pay for stays at these facilities, there is no federal protection for the residents. When you consider how many assisted living centers now claim to offer dementia and memory care, you can see the brewing of a perfect storm. Highly vulnerable people are at the mercy of unregulated facilities. If you have a loved one in an assisted living center, you need to know about the dark side of dementia care.

People who live in nursing homes have some protections through federal legislation. The government imposes strict rules on nursing homes that receive funding from Medicare or Medicaid. Most assisted living centers are private pay, so the federal government cannot regulate them.

Some states have regulations designed to protect people in long-term care facilities. These states are discovering appalling conditions at many assisted living centers that advertise dementia care. Let’s be clear – there are wonderful facilities that provide fantastic dementia care. The problem is, a great number of for-profit facilities have sprung up quickly, without enough focus on the best interests of the residents.

The Reasons for Unacceptable Conditions at Dementia Care Facilities

The number of Americans with Alzheimer’s disease and other forms of dementia has risen dramatically over the last 20 years. Businesses all over the nation have seized on this opportunity to make a profit, by providing specialized care services. The problem is, many of these facilities do not deliver the promised level of care and security for these residents.

Long-term care can cost $5,000 to $7,000 a month or more. Most of the facility employees get paid low wages, particularly the workers who provide the lion’s share of the hands-on care of residents. To increase profits, the corporations that own and run these facilities often have high patient-to-staff ratios. In short, the centers are understaffed, and the workers are underpaid. Neither of those factors is conducive to the safe, attentive, nurturing environment that a person with dementia needs.

A Climate of Not Caring

Even when a state has regulations for assisted living centers, the punishments show little value for the well-being and lives of the elderly. For example, a 90-year-old lady with dementia lived in an assisted living facility in South Carolina. When she wandered away from the center one night, her absence went unnoticed for seven hours. By the time someone finally realized she was missing, she had already met a gory death.

An alligator in the pond next to the center killed and partially ate her. Her granddaughter was one of the first people to find the remains of the body. A year later, the state cited the facility for more than 10 violations involving patient safety, including not maintaining adequate numbers of staff and failing to perform nightly checks of residents. The state imposed a fine of $6,400.

Long-term care ombudsmen across the U.S. say that many facilities use psychotropic drugs as chemical restraints, instead of providing the quality care the residents need and for which they are paying thousands of dollars every month. The staff members often do not have training in dementia care, but even in states with a training requirement, industry experts say the regulations get ignored.

Every state makes its own regulations. Be sure to talk with an elder law attorney near you to find out how your state might differ from the general law of this article.

References:

Huffpost. “Dementia Care Is A Lucrative Business. Its Breakneck Growth Is Costing Patients’ Safety.” (accessed November 8, 2019) https://www.huffpost.com/entry/assisted-living-dementia-injuries_b_5c1d6f88e4b04aa0a171b895

How Does Traveling While on Medicare Work?

CNBC’s recent article, “Planning to travel while on Medicare? Make sure you have coverage at your destination” explains that basic Medicare—which includes Part A (hospital coverage) and Part B (outpatient care)—typically doesn’t cover any medical costs outside of the U.S. and its territories. There are a few Medicare Advantage Plans that cover emergency services overseas, as well as some Medigap plans that also offer protection.

If you’re on Medicare, your coverage away from home depends partly on your destination and if you’re on basic Medicare or receive your benefits through an Advantage Plan. This also can depend on whether the health care you get is routine or due to an emergency.

Travel medical insurance can be the solution to gaps in coverage, but it’s good to first determine whether you need it. Remember that original Medicare consists of Part A and Part B. Retirees who opt to stay with just this coverage—instead of going with an Advantage Plan—typically pair their coverage with a stand-alone prescription-drug plan (Part D). If you fit in this situation, your coverage while traveling in the U.S. and its territories is fairly simple. You can go to any physician or hospital that accepts Medicare, regardless of the type of visit.

However, when you journey beyond U.S. borders, things get more complex.

Generally, Medicare doesn’t provide any coverage when you’re not in the U.S, with a couple of exceptions. These include if you’re on a ship within the territorial waters adjoining the country within six hours of a U.S. port or you’re traveling from state to state but the closest hospital to treat you is in a foreign country. As an example, think a trip to Alaska via Canada from the 48 contiguous states.

Roughly a third of retirees on original Medicare also buy supplemental coverage through a Medigap policy (but you can’t pair Medigap with an Advantage Plan). Those policies, which are standardized in every state, vary in price and offer coverage for the cost-sharing parts of Medicare, like copays and co-insurance. There are some Medigap policies—Plans C, D, F, G, M and N—that offer coverage for travel. You pay a $250 annual deductible and then 20% of costs up to a lifetime maximum of $50,000. However, that may not go very far, depending on the type of medical services you need.

There’s also no overseas coverage through a Part D prescription drug plan, and Medigap policies don’t cover any costs related to Part D, whether you’re in the U.S. or not. For seniors who get their Medicare benefits—Parts A, B and typically D—through an Advantage Plan, it’s a good idea to review your coverage, even if you’re not leaving the U.S. any time soon. These plans must cover your emergency care anywhere in the U.S., but you may have to pay for routine care outside of their service area or you’ll pay more.

Some Advantage Plans may also have coverage for emergencies overseas, so review your policy. Whether you have an Advantage Plan or original Medicare, travel medical insurance might be a good move if you think your existing coverage isn’t enough. The options are priced based on your age, the length of the coverage and the amount. In addition to providing coverage for necessary health services, a policy usually includes coverage for non-medical required evacuation, lost luggage and dental care required due to an injury.

There’s coverage for a single trip of a couple weeks or several months, or you can buy a multi-trip policy, which could cover a longer time period.

It’s also important to know if your policy covers pre-existing conditions, since some don’t. You should also be aware that some Advantage Plans might disenroll you, if you stay outside of their service area for a certain time, usually six months. In that situation, you’d be switched to original Medicare. If you are disenrolled, you’d have to wait for a special enrollment period to get another Advantage Plan.

Reference: CNBC (July 14, 2019) “Planning to travel while on Medicare? Make sure you have coverage at your destination”

Relocating for Retirement? What You Need to Know

Sometimes having too many choices can become overwhelming. Move closer to the grandchildren, or live in a college town? Escape cold weather, or move to a mountain village? With the freedom to move anywhere, you’ll need to do some serious homework. A recent article titled “Don’t Relocate in Retirement Without Answering These 5 Questions” from Nasdaq contains some wise and practical advice.

There are some regions that are more retirement-friendly than others. If you end up in the wrong place, it could hurt your retirement finances. Therefore, ask these questions first:

What are the state’s taxes like? If you are living on Social Security benefits, retirement savings and a pension, the amount of money you’ll actually receive will vary depending on the state. There are 37 states that don’t tax Social Security benefits, but there are 13 that do. There are also some states that do not tax distributions from retirement accounts. Learn the local rules first. If you currently live in a state with no income tax, don’t move to a state that may require a big tax check.

If you live in a high tax state and don’t have enough money saved for a comfortable retirement, then moving to a lower tax state will help stretch your budget.

Is there an estate or inheritance tax, and is that a concern for you? If leaving money to heirs doesn’t matter to you, this isn’t a big deal. However, if you want to pass on your assets, then find out what the state’s inheritance taxes are. In some states, there are no taxes until you reach a pretty large amount. However, in states with inheritance taxes, even a small estate may be taxed, with those who inherit sometimes owing money on even small transfers.

What’s the cost of living compared to where you live now? When you’re working, moving to a place with a higher cost of living is not as big a deal, since your wages (hopefully) increase with the relocation. However, if your cost of living goes up and your income remains fixed, that’s a problem. The last thing you want to do is move to a place where the cost of living is so high, that it decimates your retirement savings.

If you live somewhere with high taxes and high prices, moving to a lower cost of living area will help your money last longer, and could make your retirement much easier.

Is it walkable or do you need a car? Cars present two problems for aging adults. One, they are expensive to maintain and insure. Two, at a certain point along the aging process, it becomes time to give up the keys. If you live in a walkable community, you may be able to go from having two cars to having one car. You might even be able to get rid of both cars and do yourself a favor, by walking more. This also gives you far more independence, far later in life.

What’s healthcare like? Even people who are perfectly healthy in their 50s and 60s, may find themselves living with chronic conditions in their 70s and 80s. You want to live where first-class healthcare is available. Check to see what hospitals and doctors are in the area before moving. You should also find out if medical care providers accept Medicare. Consider the cost of a nursing home or home care in your potential new community. Some areas of the country have much higher costs than others.

Reference: Nasdaq (Aug. 9, 2019) “Don’t Relocate in Retirement Without Answering These 5 Questions,”

Retirement Planning: Where to Start?

While you may be thinking about retirement for a long time, with visions of tropical beaches or grand trips overseas, when the date starts to get closer, it’s time for some real analysis and planning, says limaohio.com’s recent article “What to consider when starting retirement.”

Start with a realistic assessment of your healthcare needs. At age 65, most people are eligible for Medicare. There are many different parts of Medicare, identified by letters, that are optional add-ons to expand coverage to serve more like the health insurance you have while working. Medicare is not directly charged to individuals, but the parts in which Medicare participants opt into, do require out of pocket payments.

Next, prepare a budget and cash-flow plan that reflects your current cash-flow situation and compare that to your expected cash-flow situation upon retirement. During retirement, income comes from several sources: part-time work, Social Security, distributions from retirement plans and earnings from investments or returns from investments.

As you get closer to retirement age, you can secure an estimate of your benefits from the Social Security Administration. This can be done by going to the government agency’s website and creating a “my Social Security” account, by calling the local office or sending a letter via mail. Note that the estimates are only estimates. Don’t depend on those being the final numbers.

Social Security benefits are based on the number of years you have worked and the amount of money that was contributed to Social Security over a lifetime. Many people mistakenly think that Social Security is a government managed retirement system, where there is a relationship between what gets paid and what is distributed. However, Social Security’s process of determining benefits is based on a formula.

Based on your birthdate, Social Security calculates the age at which you can receive the program’s maximum benefit. If you take benefits before that date, then the monthly amount will be smaller over your lifetime. The longer you can delay taking benefits after your Full Retirement Age (FRA), the larger the monthly payment will be.

Retirement accounts, like 401(k)s and IRAs, allow for withdrawals without penalty after age 59 ½. Unless the account is a Roth IRA, any amounts withdrawn will be subject to taxes. At age 70 ½, account owners are required to withdraw a certain amount from IRAs and 401(k)s, known as Required Minimum Distributions (RMDs).

All this information needs to be considered to plan for retirement, especially with the prospect of needing long-term care, including nursing home or in-home care. This usually involves planning to someday become eligible for Medicaid, if needed.

When you are preparing for retirement, it’s also a good time to make sure that your estate plan is in place. An estate plan that has not been reviewed in three or four years may only need a few tweaks, or it may need a complete overhaul. Speak with your estate planning attorney to make sure you’ve covered all of your retirement bases.

Reference: limaohio.com (Aug. 31, 2019) “What to consider when starting retirement.”